Hoyer Close to Suing Switcher

For Immediate Release:

October 6, 2004

Contact Info:

Erin Billings

Roll Call

Lawyers for House Minority Whip Steny Hoyer (D-Md.) late last week sent a legal “demand letter” to party switching Rep. Rodney Alexander (R-La.), insisting the one-time Democrat return $35,000 in Hoyer campaign contributions by Oct. 15 or face a lawsuit.

In the Oct. 1 certified letter obtained by Roll Call, lawyers at the D.C. firm, Brand & Frulla, demanded Alexander immediately refund all of Hoyer’s contributions dating back four years. In so doing, Hoyer’s attorneys allege the Louisiana lawmaker — by misrepresenting himself as a Democrat — committed fraud when he collected those funds and has a legal obligation to return them.

While the lawyers do not directly threaten a lawsuit, Hoyer said Tuesday he will take Alexander to court if he doesn’t get his money in the time frame outlined in the letter. The document lays out a legal argument and case history to argue the refund is justified.

“I expect to be recompensed for the money I gave and raised for him,” said Hoyer, who helped recruit Alexander to run as a Democrat in 2002. “If he doesn’t [give it back], I will take the next step.”

When asked what that step would be, Hoyer replied: “File suit.”

Hoyer and other House leaders have for weeks privately discussed going to court if Alexander keeps money they have contributed or helped to raise for him. According to Democratic leadership sources, only one Member, Rep. Mike Ross (D-Ark.), has received a refund from Alexander so far.

Several attempts to reach Alexander and his spokesman were unsuccessful Tuesday. In the past, however, Alexander has insisted he will return all the contributions and hoped Democratic leaders would opt against a lawsuit.

Last month, Alexander’s chief of staff, Royal Alexander (no relation), said his boss was trying to assemble new campaign and personal staff and once those employees were in place, checks would be written. The delay was not intentional and Alexander would give the money back as soon as possible, Royal Alexander said then.

But Hoyer said he didn’t believe that line, and suspects Republican leaders have pressured Alexander to withhold the cash until after the election — a move that would hinder the efforts of Hoyer and other Members to funnel the funds to Democratic candidates.

“Not only did he induce us to give him money, but now he’s holding onto it illegally for the purposes of preventing us from helping other Democrats,” Hoyer charged.

Hoyer made a personal appeal to Alexander for a refund of his contributions in a Sept. 8 letter. Several other Members and leaders have also written letters to Alexander asking for their money back.

Specifically, the Minority Whip is asking that Alexander give back $14,000 in contributions made this cycle, and another $21,000 given during the 2002 election. Those amounts include funds from Hoyer’s political action committee, re-election campaign and other contributions he solicited on Alexander’s behalf from other Members.

Overall, Democratic Members have given Alexander more than $70,000 this cycle.

Democratic Congressional Campaign Committee Chairman Robert Matsui (Calif.) said late last week Members are growing tired of waiting.

To my knowledge, “not one Member on our side of the aisle has received a check,” Matsui said. “It’s unfortunate, especially if he intends to pay it back after the election. He should pay us interest. That money is not his money any longer.”

In Hoyer’s case, his lawyers laid out their case for why the money should be returned now, alleging Alexander committed fraud because he knowingly misrepresented his party-switching plans.

Called a “demand letter,” such legal documents are often used by lawyers as a final warning before filing a lawsuit. The move can also be used as a tool to ramp up pressure on its recipient to comply with its terms, or to generate press or public attention, noted one Washington lawyer knowledgeable about such litigation strategies.

“It can be a ploy or a tactic used to scare someone into doing something, it can serve a technical function of setting forth the grounds for a lawsuit, or it can be used as a publicity tool,” said this attorney, who had not seen Hoyer’s letter and had no knowledge of its substance or merits.

Hoyer explained that Alexander “induced” Members into giving to his campaign by maintaining he was a Democrat and intended to remain in the party. Hoyer said he gave to Alexander because he took him at his word.

“We haven’t gotten our money back and I’m angry about it,” Hoyer said. “It’s not ethical behavior. I call it perfidy. I believe that word is applicable.”

Hoyer’s attorneys argued that Members would not have contributed to Alexander’s reelection campaign had he been forthright about his discontent with the Democratic Party and desire to switch. They pointed to numerous press accounts in which Alexander promised to remain a Democrat (including to Hoyer), but later said publicly that switching to the GOP was “something I’ve been looking at all along.”

“Your firm and repeated commitments to Mr. Hoyer in the face of the personal indecision you, yourself, have admitted in the press and to the Republican National Convention, present certain important legal issues,” the lawyers wrote. “Under established law, a misrepresentation is fraudulent if the maker ... does not have confidence in the accuracy of his representation that he states or implies.”

While Hoyer is taking the lead on pursuing legal action, Democratic sources within the Caucus said he is not without allies and backers.

“Clearly in terms of what Hoyer’s doing with the letter and a possible lawsuit, there is a lot of support for that,” said one Democratic leadership aide. “Not only has Rodney lied to Members, but [he’s engaged in] fraudulent activity.”